A new study by Markel Direct, the specialist insurer of small businesses, has revealed the biggest hurdle business owners have had to overcome after starting a business.
The study asked UK business owners about the main challenges they faced when launching their ventures. According to the study, the biggest challenge reported by business owners was building a customer base or gaining visibility, with 4 in 10 (40%) of respondents citing this.
In second spot, and highlighted by over a third of respondents, was lack of cash flow (35%), whilst lack of capital (29%) and difficulty of establishing a healthy work/life balance (29%) also featured in the top five challenges.
Interestingly, nearly a quarter (23%) of business owners felt they lacked confidence in their own abilities when first starting out, despite having the drive to start a business in the first place.
Main challenges when starting out
% Business Leaders
Difficulty building a customer base or gaining visibility 40%
Lack of cash flow 35%
Lack of capital 29%
Establishing a healthy work/life balance 29%
Lack of confidence in my abilities 23%
Have you got what it takes? Problem-solving solving cited as the top skill entrepreneurs need to be successful in business
The study also asked business owners which skills were most crucial when setting up their business, with problem-solving, a chosen skill for 36% of respondents, being named as the number one skill that entrepreneurs should possess to be successful in their business venture.
Persistence (35%) and decision making (33%) were also named in the top three, whilst time management (31%) and resilience (29%) were fourth and fifth respectively.
Top skills needed to run a business, according to business leaders
Problem-solving (36%)
Persistence (35%)
Decision-making (33%)
Time management (31%)
Resilience (29%)
Financial management (25%)
Adaptability (24%)
Marketing (24%)
Networking and relationship building (24%)
Communication skills (21%)
Poor planning and pricing are the number one mistakes entrepreneurs make
With regards to the most common mistakes made by new business owners, not having a clear business plan (39%) and not pricing products or services appropriately (39%) were the joint top mistakes.
A business plan gives a company clear direction and defines its long-term goals, and it helps identify challenges early and track progress effectively. Without one, businesses risk losing focus and missing growth opportunities. There are guides on how to write a business plan online, or business owners or prospective owners can enlist the help of a business consultant.
In second spot was setting unrealistic initial growth targets (37%), followed by poor financial management/managing cash flow (36%).
To read the full study, visit the Markel Direct website.
